TECHNICAL NOTE
INTRODUCTION
1 When interpreting the results of a survey, it is important to take into account factors that may affect the reliability of the estimates. Estimates in this publication are subject to both nonsampling and sampling errors.
NONSAMPLING ERRORS
2 Nonsampling errors may arise as a result of errors in the reporting, recording or processing of the data and can occur even if there is a complete enumeration of the population. These errors can be introduced through inadequacies in the questionnaire, treatment of nonresponse, inaccurate reporting by respondents, errors in the application of survey procedures, incorrect recording of answers and errors in data capture and processing.
3 The extent to which nonsampling error affects the results of the survey is difficult to measure. Every effort is made to reduce nonsampling error by careful design and testing of the questionnaire, efficient operating procedures and systems, and the use of appropriate methodology.
4 Some of the items collected in the Business Characteristics Survey (BCS) are dynamic in nature and the concepts measured are subject to evolution and refinement over time; it is not possible to measure the impact of these changes on data quality.
5 The approach to quality assurance for the BCS aims to make the best use of Australian Bureau of Statistics (ABS) resources to meet user prioritised requirements  both in terms of data quality and timing of release. The approach specifies the level and degree to which each data item is quality assured, noting that only some of the total output from the BCS is able to be quality assured to the highest standards. Different priorities are assigned to groups of data items, with highest priority being assigned to key point in time data on business use of IT and innovation.
6 The 201617 BCS had a response rate of 94%.
SAMPLING ERROR
7 The difference between estimates obtained from a sample of businesses, and the estimates that would have been produced if the information had been obtained from all businesses, is called sampling error. The expected magnitude of the sampling error associated with any estimate can be estimated from the sample results. One measure of sampling error is given by the standard error (SE), which indicates the degree to which an estimate may vary from the value that would have been obtained from a full enumeration (the 'true' figure). There are about two chances in three that a sample estimate differs from the true value by less than one standard error, and about nineteen chances in twenty that the difference will be less than two standard errors.
8 The following is an example of the use of standard error on the estimated proportion of businesses with innovative activity that was still in development. As presented in this release the estimated proportion of businesses with innovative activity that was still in development was 20.9%. The standard error of this estimate was 0.7%. There would be about two chances in three that a full enumeration would have given a figure in the range of 20.2% to 21.6%, and about nineteen chances in twenty that it would be in the range 19.5% to 22.3%.
9 In this publication, indications of sampling variability are measured by relative standard errors (RSEs). The relative standard error is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to sampling, and thus avoids the need to refer to the size of the estimate. Relative standard errors are shown in the Relative Standard Error table in this section. RSEs for all data included in this release (including data cube content) are available upon request.
10 To annotate proportion estimates, a value of 50% has been used in the calculation of RSE rather than the estimated proportion from the survey data. This avoids inconsistencies between the way very low and very high proportions are annotated. Relative standard errors for estimates in this publication have been calculated using the actual standard error and the survey estimate (referred to as x) in the following manner: RSE%(x) = (SE(x)*100)/50.
11 Using the previous example, the standard error for the estimated proportion of businesses with innovative activity that was still in development was 0.7%. Multiplied by 100 and then divided by 50 gives an RSE calculated on this basis of 1.4%. It is these figures that appear in the table appended to this chapter.
12 For the tables in this publication, estimates with RSEs between 10% and 25% are annotated with the symbol '^'. These estimates should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with RSEs between 25% and 50% are annotated with the symbol '*', indicating that the estimates should be used with caution as they are subject to sampling variability too high for most practical purposes. Estimates with an RSE greater than 50% are annotated with the symbol '**', indicating that the sampling variability causes the estimates to be considered too unreliable for general use.
13 For estimates of proportion the symbol '^' means that the estimate from full enumeration could lie more than a decile away so the estimate should be used with caution. For example a proportion estimate of 30% annotated with '^' means the full enumeration value could lie beyond the range 20% to 40%. The symbol '*' means the estimate from full enumeration could lie more than a quartile away and is subject to sampling variability too high for most practical purposes. A proportion estimate of 30% annotated with '*' means the full enumeration value could lie beyond the range 5% to 55%. Proportion estimates annotated with the symbol '**' have a sampling error that causes the estimates to be considered too unreliable for general use.
14 Readers of this release should note that most of the data have an RSE of less than 10% in this publication.
Relative Standard Error  Innovation in Australian Business, selected indicators(a), by employment size(b), 201617 

  04 persons  519 persons  20199 persons  200 or more persons  Total 
  %  %  %  %  % 

Total number of businesses(c)  1.16  2.42  4.49  6.93  0.41 
Businesses that introduced innovation (innovating businesses)  2.06  3.17  4.22  5.54  1.70 
Businesses with innovative activity that was:      
 still in development  1.71  3.00  4.45  7.02  1.37 
 abandoned  1.18  2.16  2.65  2.51  0.95 
Businesses with any innovative activity (innovationactive businesses)  2.02  3.34  4.10  5.34  1.72 

(a) RSEs are on proportions basis. 
(b) Proportions are of all businesses in each output category.
(c) Business counts are provided for contextual information only. Refer to the Explanatory Notes. 
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